The past few weeks have seen volatility in the word’s economy. News about the possible shut down of the US economy have emerged. Worries about ticklish stock markets and erratic economic situations in China and Europe seem to create panic in global investments and trade. Indeed, volatility in the global economy has become a reality. And the fate of both emerging markets and developed ones also hang in uncertainty. However, there is equal opportunity for both economies to become better. And ultimately build a united economic force that would stand the test of time.
What Drives Emerging Markets
Emerging markets and their economies, constitute about 80% of the world’s population and about 20% of the world’s economy. Popularly known as the Emerging Market Economy (EME), the success of such markets is mainly driven by a stable economic environment.
Some big countries and small nations today, are labeled as emerging markets , as they walk the path of reformation in government and economic programs. Undoubtedly, EMEs have the opportunity to become fast and growing economies. But this is only possible through genuine economic reforms.
It is our view, that emerging markets must also walk a genuine path of economic righteousness and move from closed to open market economies. By establishing accountability in their economic system, the investment opportunities of emerging markets become even much higher. As the advanced world economies sees opportunity to invest and do business in them, emerging markets prevail.
Foreign investment capital in emerging markets is a plus. It indicates trust and long term flow of currency in these emerging markets and ultimate boosting their stock markets and overall economic infrastructure.
Global Economic Benefits and Wars
Developed economies also stand to benefit at the success of emerging markets. It opens new avenues to expand their trade and offers the opportunity to own part of emerging markets resources and economic achievements.
An increase in the Gross Domestic Product (GDP), of emerging markets also ensures, that the gap between developed and developing nations are consistently bridged. This eliminates dependency on foreign economies and independence to emerging markets. There is also an opportunity for the global micro investor, to assert favorable business authority in his area of interest.
Nevertheless, developed economies or those nations that due to their size, influence or engagements in the global economy have attained such status, must show leadership in handling their economies. Uncertainty or flaky political or economic decisions from them, adds to the volatility of the already shifting global economy. Hard and genuine political and economic calls must be made irrespective of one’s political affiliations.
The world recently showed solidarity with emerging markets economies in Africa at the Global Entrepreneurship Summit held in Kenya. However, the essence of this important economic call and others already being nurtured, could be defeated if leading economies do not put their houses in order.